• Sands Abstract, LLC
  • 70 E. Sunrise Highway Suite 606
  • Valley Stream, NY 11581
  • 516-821-3420
  • info@sandsabstract.com

Basics of title insurance

SANDS ABSTRACT, LLC assists its clients in understanding the basics of title insurance. It is committed to educating attorneys who may be just starting out in the field of real estate and who is possibly handling his first real estate transaction. SANDS Abstract will educate a home buyer who is purchasing his first home and is interested in understanding the basics of title insurance.

Title insurance, unlike other types of insurance, provides insurance from the consequences of past events rather than future occurrences. Additionally, unlike other types of insurance, the home or property buyer makes only one premium payment at the time of purchase for a lifetime of coverage on the home or property as long as he owns it.

Title Insurance Protects Right of Ownership

SANDS ABSTRACT, LLC emphasizes the point that anyone who has a financial or ownership interest in a property should have title insurance. Title insurance protects a purchaser’s ownership of a property from legal challenges that might arise from an illegal or erroneous transfer of title before the purchaser bought the property. Title insurance also protects an owner from a lien, judgment or encumbrance placed on the property prior to the purchase. Title insurance covers legal fees and the cost of any related past judgments levied against the property or challenges to ownership of the property up to the limit of coverage.

Types of Title Insurance Policies

  • Owner’s Policy: Every homeowner should purchase an owner’s policy covering the purchase price of the home.
    • A purchaser may seek to purchase additional coverage to cover an additional amount should his home rise in value during the period in which he owns his home.
    • A purchaser should be sure to review his title policy for correctness in spelling of owner names, property address, and coverage amount.
    • A purchaser should have his attorney review the title policy to determine if the policy includes any pertinent “exceptions” which will not be covered by the policy.
  • Lender’s Policy: Every lender will require a home buyer to purchase title insurance covering the amount of the mortgage or loan.
    • The face amount of the lender’s policy decreases as the mortgage decreases.
    • The lender’s attorney will review the title policy for correctness of the lender’s name, as well as the homeowner(s)’s name, property address, date coverage begins.
    • The lender’s attorney will review title policy to determine if the policy “excepts” any relevant aspects from title coverage.
    • The lender’s attorney will review title to ensure that policy is Underwritten by a reliable underwriter.